Search age:

Search in:

Conroy rejects $90 billion+ NBN claims

Daniel Hurst

Minister for Broadband and Comunications Senator Stephen Conroy is sticking to the government's deadline on media reforms. Photo: Colleen Petch

The Gillard government has rejected claims the cost of the national broadband network will more than double to $90 billion, saying the Coalition was a ''fact-free zone''.

As the opposition prepares to release its long-awaited broadband policy as early as this week, News Ltd has reported that analysis contained in the document predicts the cost of the government's flagship high-speed internet project could exceed $90 billion.

It also claimed the project's completion may be delayed by four years to 2025.

Communications Minister Stephen Conroy denied the claims and played down previous revisions to the rollout schedule and cost.

Advertisement

''The corporate plan audited by the Auditor-General is produced each year and what we've seen in that corporate plan is $37.4 blllion is the cost of building the NBN, not as today the Coalition are claiming $90 billion,'' he told ABC Radio's AM program on Monday.

''The Coalition are a fact-free zone. They don't have any facts to support these claims. They rely on misleading statistics and misleading data to try to make these scare campaigns.''

Senator Conroy dismissed long-running opposition and business calls for a cost-benefit analysis of the NBN rollout, saying the costs were ''black and white'' and revenue over time would cover the expense.

''The cost-benefit analysis argument works if you claim the NBN isn't making money. The NBN corporate plan clearly states the NBN makes money over time; over the life of the project it makes its money and the Australian taxpayers get paid back every cent plus interest.''

Senator Conroy claimed the Coalition's policy, which would see high-speed fibre rolled out to ''nodes'' rather than directly to each home, would lead to steep costs for people to then connect their house to the system.

''In the UK, BT – Malcolm Turnbull's favourite company; he quotes them all the time – are charging up to $5000 to actually connect fibre to the home,'' he said.

Comment is being sought from opposition communications spokesman Malcolm Turnbull, who has previously vowed to cut rollout costs and timeframes by shifting to a fibre-to-the-node project instead of the government's fibre-to-the-premises approach.

''There is real concern within the business community at the potential for further delays to the NBN rollout,'' the groups's chief executive, Innes Willox, said on Sunday.

''NBN Co recently made significant downgrades to the June 30 premises-passed forecasts with further updates promised in coming months. A change of policy may take up to 18 to 24 months to implement given the complex legal, commercial and policy issues involved.

''Both sides of politics need to articulate how they will ensure momentum in the NBN rollout, giving businesses the confidence to plan around a clear and certain timetable for when they can access services.''

The Coalition has made similar claims about cost and time blowouts in the past.

Last month, Mr Turnbull told Fairfax Media's Breaking Politics program: ''If this NBN were to proceed with its construction on the basis of the government's plan, it would be likely in my view, and it's not an uninformed view, to take over 20 years to complete, and a hundred billion dollars.''

86 comments

So what if it costs 90 or 100 billion dollars, every cent is fully recoverable plus interest. This country is massive and try to cover every conceivable corners take time and money. Once the fibres are in places they will be there for good save any minor twitching, any future upgrade should only deal with the electronic switchgear and software. My cable broadband has been around since the very beginning and it never fails, as soon as the optical fibre network become available in my area I will be one of the first to jump on board.

Commenter

mais51

Location

Sydney

Date and time

April 08, 2013, 10:54AM

This is just some more dodgy spin by the LNP.. say it enough and people will start to believe you. They say these things based on no evidence whatsoever... just as they spun the carbon tax that would wipe out Whyalla and businesses etc. Remember it was Howard who sold the public asset of Telstra for $50 billion with the promise of "high speed broadband" but in reality left us with a structural deficit.

The LNP would prefer to have the one lane harbour bridge because it will save money and give us a surplus and forget about the cost of traffic jams and business disruption because at some time in the future they will work with private enterprise to give us a toll road.

The NBN will return to Australia (us) a minimum of 7% - the LNP will sell this asset and give us an inferior product that keeps the existing copper. Online trade in Australia is over $13 billion in the last year a growth of $2 billion what the LNP will do is give us a Lada instead of a Ferrari and we'll all suffer and wonder in years to come why we are so far behind.

Australia needs "fact checkers" just as Malcolm to stop the BS in Australian politics.

Commenter

n720ute

Location

North Coast NSW

Date and time

April 08, 2013, 12:35PM

I would also advise everyone to read the article (link at the bottom of story) about what it would cost to change the model at this stage and the status of the copper technology.

The LNP are not doing this to advance our country they are doing this to try to win an election at all costs. Sadly the cost to the nation will be more than the pick out of the air figure of $90 billion through lost trade and inferior technology. It will mean a lost future because the jobs that will come with the NBN will be lost

Commenter

n720ute

Location

North Coast NSW

Date and time

April 08, 2013, 1:31PM

n720ute - a couple more facts for you.

In late 2010 we were advised that by this financial year the NBN would pass 1.3 million households. The current projection is 10,000. The take up rates have clearly been appalling, but Conroy won't release those.

When it was first proposed, the cost was $4.7 billion. Suddenly, it went up ten-fold.

The government has consistently hidden as much as it can on the project, but it looks like government financial regulations, driven by the financial disaster the NBN currently is, might force some disclosure, but don't bet on it.

So if you think that any positive rate of return is achievable, you've been "spun" by Conroy.

Commenter

Hacka

Location

Canberra

Date and time

April 08, 2013, 1:36PM

It can cost anything and it will last forever! This is the logic that will get Labor booted out in the next election. I like the idea of an NBN, but the complete separation from reality that the NBN fan club have is quite disconcerting.

Commenter

Malcolm

Date and time

April 08, 2013, 1:48PM

The article is "The Ninety Billion Nightmare" was front page of the News Ltd tabloid The Daily Telegraph. The NBN is a direct threat to News Ltd's Foxtel and Foxsports.

Tony has weekly meetings at News Ltd offices, and Tony Abbott and Rupert Murdoch went to the IPA 70th Anniversary Dinner in Melbourne.Some of the 70 IPA policies that an Abbott gov will do if he wins the election.48 Privatise Australia Post49 Privatise Medibank50 Break up the ABC and put out to tender51 Privatise SBS 69 Immediately halt construction of the National Broadband Network and privatise any sections that have already been built72 Privatise the CSIRO75 Privatise the Snowy-Hydro Scheme

Commenter

Foster

Date and time

April 08, 2013, 2:03PM

Mais51 says:"So what if it costs 90 or 100 billion dollars, every cent is fully recoverable plus interest."

In the real world, that is, not the one that Conroy lives in, they have this thing called competition. It's one of those economic instruments that makes organisations do things in the most cost effective way, so that they can compete against other, more agile and efficient companies offering the same or similar products and services at a lower cost or in a more attractive package.

Remember that thing call The Post Master General's Department that became Telecom (after they split off Australia Post), then Telstra? Well, since we've had others playing in the Telstra/Australia Post field, services have improved or prices have become more competitive, or both.

So Conroy and his cronies decide it's a better idea to wind back the commercial clock by about 50 years and build the NBN monopoly. Great idea.

And Conroy's got the gall to claim:''The cost-benefit analysis argument works if you claim the NBN isn't making money. The NBN corporate plan clearly states the NBN makes money over time; over the life of the project it makes its money and the Australian taxpayers get paid back every cent plus interest.''

Somehow, while I (and most other Australians) agree that a fast Internet is a good thing to have, it should not be at any cost. Particularly when there's strong competition for capital investment in other (possibly more) essential things like roads, fast rail, hospitals, schools, better teachers, etc.

Hopefully, given the ridiculously inept performance of this current government, our country will soon revert to well managed public administration of our hard earned and finite taxes.

Commenter

GeoffWhere

Location

Sydney

Date and time

April 08, 2013, 2:20PM

Like many large scale infrastructure projects, the NBN will likely only make money if and when it's sold to private interests years down the track, way after Conroy's incompetent tentacles are removed from it.

Commenter

Hacka

Location

Canberra

Date and time

April 08, 2013, 2:34PM

@Hacka

You're the one who has been spun by Abbott. The 'original' cost of $4.7 billion was for a Fibre to the Node network, essentially what the LNP are proposing. The problem is, it does nothing about the last mile copper to each house that in many areas is in dire states of disrepair.

As with the households passed, the 1.3 million was for the FTTN proposal. The far superior FTTP network will obviously roll out slower due to the larger amount of work to be done.

Commenter

Pookey

Location

Sydney

Date and time

April 08, 2013, 2:58PM

Pookey - the FTTP decision was announced in early 2009, way before Gillard's 1.3 million announcement.

Of course large projects can go off schedule, but very few people expected any sort of success with Conroy and his henchman at the helm.

Subscribe to IT Pro

Editor's Choice

Prime Minister Tony Abbott has bolstered Malcolm Turnbull's ministerial duties, handing him greater responsibility for e-government in a push to expand the use of a single digital identity for Australians.

Data

The new roof that spans Margaret Court arena does more than keep out the weather. Built into the gantries that surround the sliding ceiling are Wi-Fi antennas that beam web access to every ticket holder.